Imperial Brands: Financial Ratio Analysis

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Financial Condition

Liquidity Ratio: In figure 1, the current ratio illustrates Imperial Brands ability to pay their current liabilities. Imperial Brands were not likely to pay their current liabilities in 2012 and 2013, since a current ratio that is below 1 is not a good sign. However, their current ratio increased significantly in 2014 and 2015, since their current liabilities reduced and their current assets increased. Moreover, Imperial Brands’ current ratio is lower than the industry current ratio, which illustrates that Imperial Brands is not in a stable financial condition.

Activity Ratio: In figure 2, the total asset turnover demonstrates how efficient Imperial Brands is managing their assets. Additionally, Imperial Brands has a total asset turnover equal to one in 2012 - 2014, which demonstrates their total assets is higher than their net sales. Moreover, the total asset turnover in the Tobacco Industry is slightly above 1 throughout 2012 and 2015, which demonstrates their total assets is also higher than their net sales. Overall, Imperial Brands’ total asset turnover is slightly below the Tobacco Industry but it is not enough to state Imperial Brands financial condition is weak. Therefore, Imperial Brands is in stable financial condition.

Leverage Ratio: In figure 3, the debt to equity ratio shows the
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Supply chain management in Imperial Brands includes receiving tobacco products from vendors and inspecting the tobacco to ensure it is superior quality. Furthermore, the operations in Imperial Brands include the steps to convert the tobacco into cigarettes and package them into a box for consumers. In addition, the distributions in Imperial Brands contains taking the finished tobacco products to retailers, so consumers can purchase the product. Consequently, the elements of Imperial Brands’ value chain allow the company to function

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